The federal government wants to get serious about reducing bureaucracy. Associations have been calling for this for a long time. Economics Minister Habeck presents a concrete proposal.
Federal Minister of Economics Robert Habeck wants to relieve the burden on companies in Germany when implementing the Supply Chain Act. The Green politician suggests suspending reporting obligations under the national supply chain law as quickly as possible – so that companies then only have to report in accordance with European law. A supply chain law is also planned at EU level.
Habeck told the German Press Agency: “It is right that we have rules on supply chains to ensure that no products come to us from child labor, for example. I know that this is also a concern for companies.” It is also right to have a European rule so that there is a level playing field for all European companies and not only German companies are subject to such obligations. “But under no circumstances should there be double reporting requirements.” Companies cannot be expected to make unnecessary changes.
In order to suspend the reporting obligations under the national supply chain law as quickly as possible so that companies only have to report in accordance with European law, the federal government is working on good solutions. “Pragmatism is the top priority here,” said Habeck.
The German supply chain law came into force at the beginning of the year. Companies have a duty to ensure compliance with human rights throughout their production. The law currently applies to companies with more than 3,000 employees, and from 2024 to companies with more than 1,000 employees. According to current law, companies must, among other things, submit an annual report on the fulfillment of due diligence obligations. This should be published no later than four months after the end of a financial year. Fines are possible for violations.
A directive on sustainable corporate governance with human rights and environmental due diligence obligations is currently being negotiated at EU level. According to the ministry, there is also a new directive on the reporting obligations of European companies in the area of sustainability, which must be implemented in the member states by next year and will then gradually be applied to companies. This reporting requirement will be binding for financial years from 2024 onwards, depending on the size of the company. The first reports are due in 2025.
At the end of August, the federal cabinet passed the key points of a law for less bureaucratic requirements. Habeck and Justice Minister Marco Buschmann (FDP) also made a proposal for a broad reduction in bureaucracy in the European Union. Business associations have long complained about excessive bureaucracy and called for relief.